The Maryland Public Policy Institute
MPPI IN THE NEWS
Although Maryland has been a leader in implementing health care reform, family health insurance premiums in the state rose by 51 percent over the last seven years, more than the national average, according to a report released Thursday.
The report by the Commonwealth Fund, an independent research organization, shows that, nationally, premiums for private-employer family health insurance increased 50 percent from 2003 to 2010.
In 2010, Maryland's average premium cost was $13,952, above the national average of $13,871. The District of Columbia had highest annual family premiums at $15,206.
Maryland is one of the first states to implement the health care exchange, which will allow both individuals and small businesses to shop and compare for the most competitive coverage. Expanding access to coverage is only one piece of the puzzle.
Yet the increases are understandable, said Vincent DeMarco, president of Maryland Citizens' Health Initiative, because the reforms that affect affordability won't be implemented until 2014.
Carolyn Quattrocki, executive director of Maryland's Office of Health Care Reform, agreed.
"The fact that we haven't seen the premiums go down is largely a reflection of the fact that we're not there yet," she said.
The report comes at a time when income growth across the country has fallen flat. Insurance premiums are rising faster than incomes for middle-class Americans, as employers are asking employees to pay higher premiums.
Employer-based health insurance costs have risen three times faster than wages since 2000, and an increasing number of middle-class Americans are living in states where health insurance premiums accounted for 20 percent or more of their income.
"Out-of-pocket costs for premiums and care are consuming a larger share of people's incomes at a time when incomes are down in a majority of states," said study co-author Cathy Shoen.
Without implementation of health care reform, costs will continue to rise, according to the report. The average premium for family coverage could increase 72 percent by 2020, to almost $24,000.
But that's only if growth rates stay the same.
New payment and assistance reforms in the Affordable Care Act could begin to curb the rising cost of insurance premiums, said Shoen. Employers and families could save $2,161 annually by 2020 if annual premium growth slowed just 1 percent.
But critics of the ACA say that the changes coming in 2014 will only drive costs higher, said Marc Kilmer, senior fellow at Maryland Public Policy Institute. That is because health care reform doesn't address the underlying causes of why health insurance is so expensive in the first place, particularly the cost of care itself. Since most health care is paid for by a third party -- either by insurance companies or the government -- there is no incentive to control costs, he said.
Kilmer points to Massachusetts, which, despite implementing health care reform in 2007, still has one of the highest costs.
"What's happening in Massachusetts is going to happen on the federal scale," said Kilmer. "Insurance coverage will go up, but that doesn't mean costs will go down."
Maryland is focusing in "like a laser" on lowering costs, said Quattrocki, by reforming the way clinicians deliver care. The state is looking at creating financial incentives for doctors who successfully manage chronic diseases and keep patients healthy.
"The law gives states leeway," DeMarco said, "and we are going to use that leeway to make health care as affordable as we can."